March 7, 2005

Corp Fin “Staff Alert” on Annual Reports

On Friday, Corp Fin posted a Staff Alert regarding Annual Report Reminders. The Staff Alert deals with:

– Disclosure of Previously Unreported Form 8-K Events

– Correct Version of the Certifications Required by Rules 13a-14(a) and 15d-14(a)

– Placement of the Internal Control Reports

– Auditor Consents

So it looks like we can now add “Staff Alerts” to the forms of written informal SEC Staff guidance that are available (joining Staff Legal Bulletins, FAQs, no-action letters, Current Issues Outline, telephone interps, etc.).

SEC Chair Speaks About Executive Compensation

On Friday, SEC Chair Donaldson gave a speech at SEC Speaks and he said this about executive compensation: “Some conflicts are best managed by focusing on how they are disclosed to investors. For example, the executive compensation process presents clear potential conflicts and clear potential for abuse. Yet, as I have said on many occasions, the solution is not to have the SEC or any regulator set compensation. Good disclosure can do a lot to address this conflict. One problem is that there has not been good enough disclosure under current rules.

The Division of Corporation Finance has been looking at this, and the Commission has brought cases in this area. This is an area where I have been disappointed by the contribution of some lawyers, who appear in at least some cases to devise their own narrow interpretations of the rules while disclosing as little as possible, rather than to seek helpful disclosure for investors. A second issue in this area is that our rules may need to be refocused, and the Division of Corporation Finance is exploring how they can be enhanced and clarified.”

In his comments, the Chairman also focused on other areas of attorney responsibilities as borne out in this article in the Washington Post.

NYSE Tweaks 303A FAQs

On Friday, the NYSE changed one of the FAQs that it had released late last week (ie. ones that I blogged about on Friday). In footnote 1 to the FAQs, the NYSE explains how the CEO/CFO cert. disclosure requirement in 303A.12(a) refers to the most recently filed 10-K; not the prior year’s 10-K.